On October 25th at the COP16 Biodiversity Conference, the Taskforce on Nature-related Financial Disclosures (TNFD) announced that more than 500 firms and financial institutions have committed to beginning nature-related corporate reporting based on TNFD recommendations. This marks a jump from the 320 organizations already committed and advances efforts to establish standardized reporting on nature-related governance, strategy and targets.
The TNFD’s backers aim for it to follow in the footsteps of the TCFD, which grew rapidly as a global standard for climate reporting after its introduction in 2017. By the time the ISSB took over its remit, the TCFD had grown from 513 supporters in 2018 to more than 3,900 firms across 101 countries by 2023.
Similarly to the TCFD’s journey, TNFD has already garnered support from major global organizations, including financial giants such as AXA and Bank of America. If the TNFD can achieve similar momentum, it could redefine how firms view and report on biodiversity impacts, complementing climate disclosures and helping stakeholders make more informed decisions.
Sustainability leaders looking to align with the TNFD framework can remain a step ahead by:
- Understanding the LEAP approach.
The TNFD has developed an assessment process for nature-related risk and opportunity management, called LEAP. This approach provides advice on how to respond to TNFD-based requirements through four steps: locate, evaluate, assess and prepare. For sustainability leaders, the LEAP approach provides structured guidance on how to identify, assess, manage and disclose nature-related issues. - Recognizing the interaction between nature and climate targets.
Engagement with TNFD should not lead to an either/or approach towards nature and climate targets; interactions between the two must address both issues at once. By expanding traditional climate reporting to include nature-related risks and dependencies, firms can gain a more comprehensive understanding of their environmental impact. - Start integrating nature data into wider reporting.
For firms already using frameworks like TCFD, decision-makers should consider building out those practices to include nature metrics. By expanding reporting to include nature-related data, organizations can anticipate and respond to TNFD requirements more effectively. Additionally, they will be better equipped to manage nature-related risks, such as supply chain disruptions due to resource scarcity or reputation damage from biodiversity impacts.
To learn more about integrating nature-related risks into sustainability initiatives, read Strategic Focus: Navigating Nature-Related Risks.
